Starting my own shop

ukbill69

When opening a shop, then expect to fork out about 3-4k to get it started.

paulwf

On the business link website you can generate a customised start up plan, you can also do it much more informally by writing down the main topics on a piece of paper. When you ask where to start you don't have to dive into one area (although premises is the key factor in your case)...by way of example it is pointless doing all the costings for a cafe if you then do market research and it turns out a deli is what people want. Work on each area bit by bit and see what direction it takes before firming up each area.

Remember that if you lease a unit you have to keep paying that rent for the terms of the lease whether your shop is trading or not. So as a poster put above bankruptcy is the worst case scenario.

The newspaper industry is in decline and has been for at least 10 years. My parents made a very good living out of a newsagents but sold up in the early 90's and these days many are shutting. Ones that are left have lottery, fax machines, meter bill payment, phone cards etc as newspapers and a pint of milk just isn't big business these days.

Milk and bread and sandwiches can have high levels of wastage, and groceries in general have a low profit margin. That is presumably why so many are now more of an off license than general store, but that requires more capital and a higher risk of theft.

"A lick of paint" can soon turn into tens of thousands. Commercial fridge and freezer units will be much more expensive than consumer units, and signage and new shop fittings don't come cheap. Solicitors and surveyors don't even know the word cheap.

In a newsagents expect to work from 5am to 6pm (in some cases much longer) 7 days a week. Even paying min wage that is a huge way payout, most small convenience stores are therefore family run and that is the family life: work.

There is a huge difference between gross and net profit. You'll pay more for your phone line as a business, if you put the radio on you'll have to pay the PRS a license, your bank will take a charge to pay money IN then again to draw it OUT, staff will expect holiday pay, sick pay, maternity pay, if you take credit cards there will be fees for terminals, the list is endless.

Age isn't important however experience is. It is good in some ways you are young because you are likely to be fitter and as you say you don't need as much to live off. Retail and management experience is a must though. Hiring the wrong people could be costly, and having the skills to manage and discipline staff doesn't come naturally to most people. Advertisers will take you for thousands if you let them. Product reps will stitch you up with all sorts of useless stock if you let them. The problem is everyone in business comes across as being your friend, not many are true friends though, most are after your money.

hunnie

Hello Rictus,

You have some retail experience through your parents shop and theory though your business course. You have youth on your side and a very positive attitude.

The only drawback in your sensible plan to wait and save enough money to fund your venture is that someone else may see and seize the opportunity.

Hope its not too long before your idea becomes a reality.
Best of Luck to you.

Regards,
Hunnie

Horace

If you live in a rural community you may be able to benefit from a competition being run by Countryfile - I heard something about it on Countryfile on Sunday night but you can find out more on their website https://www.bbc.co.uk/countryfile - the closing date however is 14 August so not much time.

Maybe you could raise funds by selling shares in the shop - I was thinking that the village of !!!!enham, Worcs recently got together to open a village shop the first one in the village for 19 years as they had a bit of a trek to the shops. The shop is manned by volunteers and I think all villagers have a share.

Also look at the council for rural affairs as they may give grants to help set up businesses in the countryside.

Good luck and personally, I think you should go for it.

DM1

Hi

After reading this thread I have finally decided to join the MSE forum for the first time after years of subscription to the email. I am currently in the process of taking over my on newsagent and have been thought the process of asking myself all the questions that you have over the period of this thread. I am 22 with a degree in Economics and come from retailing background. I will be going from a secure, well-paid office job to running my own business in a few weeks time.

Some people think this would be a silly thing to do supported by the "generalised view" of the independent retail industry in decline. Although times may be hard there are many successful newsagents out there. A “paper, pack of fags and a pint of milk” can actually add-up to substantial figures when you look at the bigger picture and due your sums correctly.

I have spent 20 years growing-up in a family business therefore have access to wider information and resources then someone new to the trade. I also have in-depth knowledge and understanding about the business and the local trade. let me summarise the few important factors to assist with your decision and next-steps.

1. Have no doubt in the fact that this is a business that requires serious work. The hours YOU will be working WILL result in considerably less social time that that of your friends. Hiring staff is costly when you do the sums. 1 part-time staff will cost approx £5,000 to £10,000 a year. Money that could be in your pocket. My hours are from 4am to 8pm 364 days a year. (Although Sunday trading can be slightly shorter).
2. Initial outlay costs for fixtures and fitting are going to set you back over £10,000 depending on the size of the premises. More importantly, attaining finance to buy/lease the premises will be the biggest hurdle. If you are leasing you obviously don’t own the land thus the bank cannot secure against the moneys borrowed easily. If it’s a freehold then you will need even greater levels of funding. This is where Family lend a helping hand.
3. Newspapers will have to come directly from either WHSmith News of John Menzis. The only two suppliers in the UK (I understand that Dawsons no longer exist). They have special terms for new businesses in that a minimum amount of sales must be met for a number of months before any long term commitments by them are agreed. Furthermore ANY newsagent will tell you that these suppliers are not the most efficient.
4. This is not a career that you can forget about after 5pm or on weekends…you are your own boss and to succeed you will have to put in the hours. If you really are passionate then it won’t be an issue.

My intention is NOT to put you off but you help you understand what is required. As I mentioned I work in an office with nothing to worry about after I walk out the door every evening and get plenty of benefits that come with a graduate job. Yet I have still chosen to go down a totally different path and work (physically and mentally) harder. Why… well there are several reasons but the most important are that:
1. The job satisfaction associated with being your own boss and not being constrained to do what you’re told is outstanding.
2. The financial rewards are substantial… from leaving uni 1 year ago and being on a reasonably good salary, then going to over DOUBLE that salary is attractive. This will enable me to buy and manage further businesses as I progress.

In one phrase … hard work pays.
My advice: start small and work up. The project you seem to be discussing appears to be quite big. Keep your feet on the ground and maybe start off with something like a kiosk - shorter hours, lower costs. Then expand as your finances allow. With regards to papers discuss sub-wholesaling with a newsagent nearby.

All the best.


:money:

Always100FC

If muhammod can't go to the mountain, why not bring the mountain to muhammod...

get mobile, now you've opened up the market for those who can't drive to your shop. then you add value services like postal pickups (if your post service is dying like most small towns)

SPITAKIMUS14_2

Hi
we bought a freehold shop for £42000 nearly 11 years ago and have now established a car spares and accesories shop with workshop.
Two years ago we spent £60000 building an extension and a flat .
The flat is rented out and the extension is used as a showroom for scooters and motorcycles which we started selling .
Now two years ago the whole lot was valued at £360000(business not included) but 2 weeks ago it recieved an average valuation of £290000 (business not included)
still thats £188000 profit (sadly taxable ).
We take a wage out of the business which probably equates to just above the minimum and we work on average 70 hours a week (allowing for accounts etc)
We employ one full time mechanic and a part time general assistant .
In the ten years i have had to buy out a partner (who was a friend)
had at least 3 staff who i asked to leave 3 staff leave me in the lurch and two students sacked for stealing (yes we have cctv and tills and fairly tight stock control .

Was it worth it well as soon as the recesions over (2 years ?) we will be selling and the big fat cheque (as long as the tax man doesnt take too much) will be wisely enjoyed
But if the business was in a leashold property it would have been a waste of time ..